Did Wayfair Help Brick and Mortar Stores?

Abstract

Using a detailed establishment level data, this study finds that the imposition of a sales tax on remote sellers resulted in a 4.8 to 7.2 percent sales increase for brick and mortar retail sellers in 2018 and 2019. Employment gains for such brick and mortar sellers for this period was approximately 4.3 percent. Such sales and employment increases were not even, as bigger establishments, those part of a national chain, and those part of a publicly-traded company generally experienced larger sales and employment gains. However, the onset of the pandemic saw much of this gain erased, as sales declined and shifted back to online retailers.